How Benchmark works
A useful benchmark should resemble the investment's mandate. Comparing a debt fund with an equity index, or a small-cap fund with a large-cap index, can create a misleading conclusion.
An example
If a fund returned 11% and its suitable benchmark returned 12% over the same period, the simple return gap is minus one percentage point before deeper risk analysis.
Why it matters for your family
Use the same dates, total-return convention and category context. Beating a benchmark in one period does not make a fund suitable for a family's goal.
Questions people ask
- What does Benchmark mean?
- A benchmark is a defined market index or reference used to evaluate an investment's behaviour and results.
- Why does Benchmark matter for a family?
- Use the same dates, total-return convention and category context. Beating a benchmark in one period does not make a fund suitable for a family's goal.
- Where can I verify information about Benchmark?
- Start with SEBI Investor, linked on this page, and the current official document for the product or tax year involved.